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The High Court has not decided the merits of the petitions. Instead, it has issued procedural directions based on a Supreme Court judgment. The court has directed that all writ petitions challenging the validity of Section 147-A of the Income Tax Act, 1961, should be identified by the respective advocates. These identified matters are to be immediately transferred to the Principal Seat of the High Court. Petitioners are granted one week to carry out amendments to their petitions to specifically challenge Section 147-A. If amendments are not carried out before transfer, they can be done within one week after the transfer to the Principal Seat. Petitioners are also given the liberty to file a 'Pursis' if they do not wish for their matters to be transferred to the Principal Seat. The court has scheduled similar groups of matters for final hearing at the Principal Seat on August 31, 2026.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO). The Court relied on its previous decision in WP No. 1778/2023 (Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others), which ruled that such notices, if not issued by the FAO, are unsustainable and liable to be quashed. Consequently, the Court quashed and set aside the impugned notice. The Court further directed that any subsequent demand notice or penalty notice issued in furtherance of the quashed notice would also not survive and would stand set aside. All other contentions of both sides, not covered by the Hexaware Technologies judgment, were left open for consideration in any fresh proceedings that might be initiated by the FAO under the scheme framed under Section 151(A).
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO) as required by the scheme framed under Section 151(A) of the Act. The Court relied on its previous judgment in Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others, which had ruled that such notices, if not issued by the FAO, are unsustainable and liable to be quashed. Consequently, the Court quashed and set aside the Section 148 notice. It further directed that any further demand notice or penalty notice issued in furtherance of the quashed notice would also not survive and were accordingly set aside. The Court left open all contentions of both sides that were not covered by the Hexaware Technologies judgment and were available in proceedings that could be initiated by the FAO under the Section 151(A) scheme.
The High Court held that the issue regarding the validity of a notice not issued by the Faceless Assessing Officer (FAO) under the scheme framed under Section 151A of the Income Tax Act, 1961, is settled by the judgment in Hexaware Technologies Limited (supra). Following this precedent, the Court found that if the notice was not issued by the FAO, it is unsustainable. Consequently, the notice issued under Section 148 of the Income Tax Act, 1961, was quashed and set aside. Any further demand notice or penalty notice issued in furtherance of this unsustainable notice would also not survive and were accordingly set aside. All contentions of both sides, except those covered by the Hexaware Technologies judgment and those available in proceedings initiated by the FAO, were left open.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO) as required by the scheme framed under Section 151(A) of the Act. The court relied on its earlier decision in Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others, which had ruled that such notices are unsustainable and liable to be quashed. Consequently, the impugned notice was quashed and set aside. The court further directed that any subsequent demand notice or penalty notice issued in furtherance of the quashed notice would also not survive and were accordingly set aside. All other contentions of both sides, not covered by the Hexaware Technologies judgment and available for initiation by the FAO under the Section 151(A) scheme, were left open for future proceedings.
The High Court has not decided the merits of the case. Instead, it has issued procedural directions based on a Supreme Court judgment. The Court has directed that all writ petitions challenging the validity of Section 147-A of the Income Tax Act, 1961, be identified and transferred to the Principal Seat of the Bombay High Court. The petitioners are granted permission to amend their petitions to include challenges to Section 147-A within one week. Matters where amendments are carried out will be transferred to the Principal Seat for final hearing on August 31, 2026. If amendments are necessary but not made before transfer, they can be carried out within one week after the transfer. Petitioners are also given the liberty to file a 'Pursis' if they do not wish for their matters to be transferred to the Principal Seat. No decision has been made on the substantive validity of Section 147-A.
The High Court has not decided the substantive issue regarding the validity of Section 147-A of the Income Tax Act. Instead, the Court is acting in compliance with the Supreme Court's directive. The primary action taken by the Court is to facilitate the transfer of these matters to the Principal Seat for final hearing. Petitioners are permitted to amend their petitions to specifically challenge Section 147-A within one week. Matters where amendments are carried out will be transferred to the Principal Seat, where a similar group of cases is scheduled for final hearing on August 31, 2026. The Court has also provided a mechanism for petitioners who do not wish to transfer their matters to the Principal Seat to file a Pursis.
The High Court has not decided the merits of the case. Instead, it has issued procedural directions based on a Supreme Court judgment. The Court has directed that all writ petitions challenging the validity of Section 147-A of the Income Tax Act, 1961, be identified and transferred to the Principal Seat of the Bombay High Court. The petitioners are granted permission to amend their petitions to include challenges to Section 147-A within one week. Matters where amendments are carried out will be transferred to the Principal Seat for final hearing on August 31, 2026. If amendments are necessary but not made before transfer, they can be carried out within one week after the transfer. Petitioners are also given the liberty to file a 'Pursis' if they do not wish for their matters to be transferred to the Principal Seat. No decision has been made on the substantive validity of Section 147-A.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO) as mandated by the scheme framed under Section 151A of the Act. The Court relied on its previous judgment in WP No. 1778/2023 (Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others), which had ruled that such notices, if not issued by the FAO, are unsustainable and liable to be quashed. Consequently, the impugned notice was quashed and set aside. Any further demand notice or penalty notice issued in furtherance of this invalid notice would also not survive and were consequently set aside. All contentions of both sides, except those covered by the Hexaware Technologies judgment and those available in a proceeding initiated by the FAO, were left open.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, is unsustainable if it was not issued by the Faceless Assessing Officer (FAO) in accordance with the scheme framed under Section 151A of the Act. The Court relied on its previous judgment in Hexaware Technologies Limited (supra), which had ruled that such notices are unsustainable and liable to be quashed and set aside. Consequently, the impugned notice was quashed and set aside. Any further demand notice or penalty notice issued in furtherance of the unsustainable notice would also not survive and were consequently set aside. The court left open all contentions of both sides, except those covered by the Hexaware Technologies judgment, which are available to the parties in a proceeding that can be initiated by the FAO under the scheme framed under Section 151A of the Income Tax Act.
The High Court has not decided the merits of the case. Instead, it has issued procedural directions based on a Supreme Court judgment. The Court has directed that all writ petitions challenging the validity of Section 147-A of the Income Tax Act, 1961, be identified and transferred to the Principal Seat of the Bombay High Court. The petitioners are granted permission to amend their petitions to include challenges to Section 147-A within one week. Matters where amendments are carried out will be transferred to the Principal Seat for final hearing on August 31, 2026. If amendments are necessary but not made before transfer, they can be carried out within one week after the transfer. Petitioners are also given the liberty to file a 'Pursis' if they do not wish for their matters to be transferred to the Principal Seat. No decision has been made on the substantive validity of Section 147-A.
The High Court has not decided the merits of the challenge to Section 147-A of the Income Tax Act, 1961. Instead, the court has issued procedural directions. It has ordered that all writ petitions challenging the validity of Section 147-A be identified and transferred to the Principal Seat of the High Court. This is in compliance with a Supreme Court judgment. The petitioners are granted permission to amend their petitions to include a challenge to Section 147-A within one week. If amendments are not carried out before transfer, they can be done within one week after the transfer to the Principal Seat. The court has also allowed petitioners to file a Pursis if they do not wish for their matters to be transferred. The final hearing for similar groups of cases is scheduled for August 31, 2026, at the Principal Seat.
The Bombay High Court held that the impugned notice dated March 26, 2024, issued under Section 148 of the Income Tax Act, 1961, is quashed and set aside. The Court found merit in the petitioner's contention that the notice was arbitrary and vitiated by non-application of mind. The Court reasoned that the Assessing Officer (AO) had a duty to consider the petitioner's explanations provided on April 3, 2021, and January 14, 2023, regarding the discrepancies in interest income reported by the Insight Portal. The AO's failure to deal with these submissions before issuing the notice, especially when the petitioner had pointed out a duplication of interest from Canara Bank, demonstrated a lack of due diligence. The Court emphasized that "any information" derived under Section 135A is not sacrosanct and requires verification, particularly when the assessee points out defects. The AO should have verified the correctness of the electronic information against the assessee's submissions before proceeding with the notice. The Court explicitly left undecided the challenge to the constitutional validity of clause (d) of the proviso to Section 148A.
The Tribunal held that the notice dated April 23, 2024, issued under Section 148 of the Income Tax Act, 1961, and the underlying order under Section 148A(d) of the Act were invalid. The reasoning was based on the explicit mandate of Section 151A of the Act and the Scheme notified thereunder, which requires reassessment proceedings, including the issuance of notices under Section 148, to be conducted in a faceless manner through automated allocation. The Tribunal relied on the Division Bench judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly stated that only the Faceless Assessing Officer (FAO) has the jurisdiction to issue notices under Section 148, and there is no concurrent jurisdiction with the Jurisdictional Assessing Officer (JAO). The Court found that the Revenue's argument that the Scheme was not applicable to Section 148 notices was contrary to the plain reading of Section 151A and the Scheme itself. The act of issuing a notice contrary to the statutory provisions causes prejudice to the assessee. Consequently, the Writ Petition was allowed, and the impugned notice and order were quashed and set aside. The Court explicitly stated that no opinion was expressed on other issues raised in the petition.
The High Court, in compliance with the Supreme Court's judgment, has directed that all writ petitions challenging the validity of Section 147-A of the Income Tax Act, 1961, be identified and transferred to the Principal Seat of the High Court. Petitioners are granted permission to amend their petitions to include challenges to Section 147-A within one week. If amendments are not carried out before transfer, they can be done within one week after the transfer to the Principal Seat. Matters not on the board are also to be transferred. Petitioners have the liberty to file a 'Pursis' if they do not wish for their matters to be transferred to the Principal Seat. The court has not decided on the merits of the challenge to Section 147-A itself, but rather on the procedural aspect of handling these cases.
The High Court held that the appeals do not give rise to any substantial question of law and dismissed the appeals. The Court reasoned that Section 22 of the Income Tax Act, 1961, does not create a distinction based on the assessee's business. Even if an assessee is in the business of letting or subletting properties, there is no embargo on accounting income from a property "owned by the assessee" as "income from house property." The Court found that the Revenue's interpretation of Section 22, which would deny this classification to businesses involved in property letting, amounted to reading something into the provision that was not present. The Court also emphasized the principle of consistency, noting that the Assessing Officer had accepted the assessee's treatment of such income as "income from house property" in prior assessment years. This consistency, the Court held, was appropriately applied by the Tribunal, citing Supreme Court decisions in M/s. Radhasoami Satsang and Godrej & Boyce Manufacturing Company Ltd. The Court distinguished the Revenue's reliance on Chennai Properties & Investment Ltd. by noting that in that case, the assessee itself had chosen to account the income as "business income," which was contrary to the present facts. Therefore, the Tribunal's decision allowing the assessee's appeals was upheld.
The High Court held that the appeals do not give rise to any substantial question of law and dismissed the appeals. The Court reasoned that Section 22 of the Income Tax Act, 1961, does not create a distinction based on the assessee's business. Even if an assessee is in the business of letting or subletting properties, there is no embargo on accounting income from a property "owned by the assessee" as "income from house property." The Court found that the Revenue's interpretation of Section 22, which would deny this classification to businesses involved in property letting, amounted to reading something into the provision that was not present. The Court also emphasized the principle of consistency, noting that the Assessing Officer had accepted the assessee's treatment of such income as "income from house property" in prior assessment years. This consistency, the Court held, was appropriately applied by the Tribunal, citing Supreme Court decisions in M/s. Radhasoami Satsang and Godrej & Boyce Manufacturing Company Ltd. The Court distinguished the Revenue's reliance on Chennai Properties & Investment Ltd. by noting that in that case, the assessee itself had chosen to account the income as "business income," which was contrary to the present facts. Therefore, the Tribunal's decision allowing the assessee's appeals was upheld.
The High Court held that the appeals do not give rise to any substantial question of law and dismissed the appeals. The Court reasoned that Section 22 of the Income Tax Act, 1961, does not create a distinction based on the assessee's business. Even if an assessee is in the business of letting or subletting properties, there is no embargo on accounting income from a property "owned by the assessee" as "income from house property." The Court found that the Revenue's interpretation of Section 22, which would deny this classification to businesses involved in property letting, amounted to reading something into the provision that was not present. The Court also emphasized the principle of consistency, noting that the Assessing Officer had accepted the assessee's treatment of such income as "income from house property" in prior assessment years. This consistency, the Court held, was appropriately applied by the Tribunal, citing Supreme Court decisions in M/s. Radhasoami Satsang and Godrej & Boyce Manufacturing Company Ltd. The Court distinguished the Revenue's reliance on Chennai Properties & Investment Ltd. by noting that in that case, the assessee itself had chosen to account the income as "business income," which was contrary to the present facts. Therefore, the Tribunal's decision allowing the assessee's appeals was upheld.
The High Court permitted the petitioner to withdraw its application dated September 30, 2022. Consequently, the impugned order dated March 31, 2023, which rejected this withdrawn application, was rendered inconsequential. The Court noted that the registration granted to the petitioner on April 4, 2022, for Assessment Years 2022-23 to 2026-27, remains legal and valid. The Court did not delve into the petitioner's apprehension about potential future actions by the department to cancel the existing registration, keeping all contentions open for assertion if the need arises. The High Court's reasoning was primarily based on the petitioner's request to withdraw the mistaken application, thereby nullifying the subsequent rejection order.
The High Court held that the impugned notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 of the Income Tax Act, 1961, were invalid and bad in law. The Court reasoned that in view of the faceless scheme notified under Section 151A of the Act, the Jurisdictional Assessing Officer (JAO) ceased to have jurisdiction to issue any notice under Section 148A(b) and to take further actions under Section 148A(d) and Section 148 of the Act outside the faceless assessment regime. This conclusion was squarely covered by the Court's prior decision in Hexaware Technologies Limited. The petition was allowed on this short ground. The Court quashed and set aside the notices dated April 12, 2024 (under Section 148), April 12, 2024 (under Section 148A(d)), and March 21, 2024 (under Section 148A(b)).
The High Court decided the five questions of law as follows: Question 1 was answered against the Assessee and in favour of the Revenue, disallowing deduction for guest house expenses. Question 2 was answered in favour of the Assessee and against the Revenue, allowing deduction for presentation articles. Question 3 was answered in favour of the Assessee and against the Revenue. The Tribunal relied on the Supreme Court's decision in CIT vs. Punjab Stainless Steel Industries, holding that sale proceeds of scrap do not form part of 'total turnover' for Section 80HHC purposes. Questions 4 and 5 were answered against the Assessee and in favour of the Revenue, following the Supreme Court's judgment in CIT vs. K. Ravindranathan Nair. The lease rent received by the Assessee was held not to be part of business income or turnover, and the disallowance of 90% of the interest component was upheld. The appeal was disposed of in these terms.
The High Court held that the investment allowance consequent to exchange rate fluctuation would be allowable. The Court noted that the question of law had already been answered by a Division Bench of the same Court on January 20, 2023, in appeals concerning an affiliate of the assessee. This earlier decision had considered the ratio in Commissioner of Income-Tax vs. Gujarat State Fertilizers Co. Ltd., which stated that the increase or reduction in liability due to fluctuation in the rate of exchange should be modified in the year of fluctuation. The Supreme Court's approval of the Gujarat High Court's view in Commissioner of Income-Tax vs. Ambika Mills Ltd. was also highlighted. Therefore, for the relevant assessment years, the investment allowance needed to factor in the exchange rate fluctuations as claimed by the assessee. The question of law was answered in favour of the appellant and against the revenue. The appeals were disposed of accordingly.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO) in accordance with the scheme framed under Section 151(A). Following the decision in Hexaware Technologies Limited, the Court quashed and set aside the notice. Consequently, any further demand notice or penalty notice issued in furtherance of the impugned notice would also not survive and were set aside. The Writ Petition was disposed of with these directions. All other contentions of both parties, not covered by the Hexaware Technologies judgment and available for initiation by the FAO under the Section 151(A) scheme, were left open.
The High Court held that the assessment order dated 28.03.2023 and the consequential demand notices dated 28.03.2023 were liable to be quashed and set aside. The Court found that the deceased assessee was not afforded adequate opportunity of being heard before the passing of the assessment order, thereby violating the principles of natural justice. The judgment notes that the deceased was suffering from a serious illness and passed away soon after the order was passed, which supports the claim of inadequate opportunity. The Court reasoned that a fair hearing is a fundamental aspect of any assessment proceeding, and its absence vitiates the order. The ratio decidendi is that an assessment order passed without adhering to the principles of natural justice is void ab initio. Consequently, the Court quashed the impugned order and notices and directed the Assessing Officer to issue a fresh notice to the legal heirs of the deceased assessee, affording them an opportunity to present their case, and thereafter, to pass a fresh assessment order in accordance with law. No issue was expressly left undecided.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, is unsustainable if it is not issued by the Faceless Assessing Officer (FAO) in accordance with the scheme framed under Section 151(A). The Court relied on its previous decision in Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others. Consequently, the impugned notice under Section 148 was quashed and set aside. Any further demand notice or penalty notice issued in furtherance of this unsustainable notice would also not survive and were set aside. The Court left open all other contentions of both sides that were not covered by the Hexaware Technologies judgment and were available in proceedings that could be initiated by the FAO under the scheme framed under Section 151(A).
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO). The Court relied on its previous judgment in WP No.1778/2023 (Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others), which established that such notices, if not issued by the FAO, are unsustainable and liable to be quashed. Consequently, the notice under Section 148 was quashed and set aside. Any further demand or penalty notices issued in furtherance of this unsustainable notice were also set aside. The Court left open all other contentions of both parties that were not covered by the Hexaware Technologies judgment, particularly those that could be raised in a proceeding initiated by the FAO under the scheme framed under Section 151(A).
The High Court held that the Tribunal's approach was fundamentally flawed. It referred to the Supreme Court's decision in Shree Choudhary Transport Co. vs. Income-tax Officer, which clarified that while the amendment to Section 40(a)(ia) by the Finance Act, 2010, was curative and retrospective, the amendment by the Finance Act, 2014, was to a substantive provision and not retrospective. The Supreme Court held that an assessee could not escape the rigour of substantive provisions by seeking succour in amendments that were not curative. The Court observed that accepting retrospective applicability of the Finance Act, 2014 amendment in such circumstances would be preposterous. Therefore, the Tribunal erred in giving retrospective application to substantive provisions of law. The appeal of the Revenue was allowed, the impugned order of the Tribunal was quashed and set aside, and the question of law was answered in favour of the Revenue.
The Bombay High Court held that the notice dated April 13, 2023, issued under Section 148 of the Income Tax Act, 1961, and the underlying order dated April 13, 2023, under Section 148A(d) of the Act, were invalid. The Court found that the Revenue had not complied with the Scheme notified by the Central Government pursuant to Section 151A(2) of the Act. Following the explicit findings in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income-tax, the Court reiterated that Section 151A contemplates a Scheme for both assessment/reassessment and the issuance of notice under Section 148, and this Scheme mandates that notice under Section 148 must be issued by a Faceless Assessing Officer (FAO) through automated allocation, to the exclusion of the Jurisdictional Assessing Officer (JAO). The Court reasoned that any other view would lead to chaos and render faceless proceedings redundant. The Court found that the Revenue's argument that the Scheme was not applicable to the issuance of notice under Section 148 was unsustainable and would render parts of the Scheme otiose. Consequently, the Court quashed and set aside the impugned notices and order. The Court explicitly stated that it had not expressed any opinion on other issues raised in the writ petition, as it was not necessary to do so.
The High Court held that the impugned notice dated July 30, 2022, issued under Section 148 of the Income Tax Act, and the impugned order dated July 30, 2022, passed under Section 148A(d) of the Act, were bad in law and liable to be quashed and set aside. The Court reasoned that Section 148A(d) mandates prior approval from a "Specified Authority" before an order to issue a notice under Section 148 can be passed. Section 151 prescribes who this "Specified Authority" is, differentiating based on whether three years or less, or more than three years, have elapsed from the end of the relevant assessment year. In this case, for assessment year 2016-17, the notice was issued on July 30, 2022, meaning more than three years had passed. Therefore, sanction under Section 151(ii) (Principal Chief Commissioner or equivalent) was required, but the sanction was obtained from the Principal Commissioner, which falls under Section 151(i). This procedural lapse, as confirmed by the precedent in Siemens Financial Services Pvt. Ltd., rendered the notice and order illegal. The Court explicitly stated that other grounds raised by the petitioner were not considered as the petition succeeded on this limited ground. The rule was made absolute, and the petition was allowed.
The High Court held that the Writ Petition had become infructuous. This decision was based on the communication received by the petitioner from the Assistant Commissioner of Income Tax Department, dated June 24, 2024. This communication explicitly stated that the proceedings initiated under Section 148 of the Income Tax Act, 1961, for the concerned Assessment Year had been dropped. Consequently, the Court, on the request of the petitioner, disposed of the Writ Petition as being infructuous. No specific finding on the merits of the original Section 148 proceedings was made, as the matter was resolved by the department's subsequent action. The operative direction was to dispose of the petition.
The High Court held that the petition must succeed. Firstly, it found substance in the petitioner's contention that the Assessing Officer's order under Section 148A(d) was flawed because it failed to consider the petitioner's submission regarding the project completion method of accounting. The order mechanically stated the reply was evasive without proper application of mind. Secondly, the Court found that the notice under Section 148A(b) was invalid as it was not issued in accordance with the faceless assessment scheme mandated by Section 151A of the Act. The judgment emphasized that when a specific jurisdiction is assigned under the scheme, it is to the exclusion of others, and adherence to the automated allocation process is mandatory. The Court stated that an act done contrary to the provisions of the statute causes prejudice and does not require further proof of prejudice from the assessee. The Court allowed the petition, declaring the notice dated 06/04/2023 issued under Section 148 as invalid.
The High Court held that the notice dated July 29, 2022, issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, was indeed barred by limitation. The Court referred to the first proviso to Section 149 of the Act, which states that no notice under Section 148 shall be issued if it could not have been issued under the pre-amended provisions due to being beyond the time limit. For AY 2015-16, the six-year period expired on March 31, 2022, making the notice issued on July 29, 2022, beyond the prescribed time limit. Furthermore, the Court found the notice to be invalid and bad in law because it was issued by the Jurisdictional Assessing Officer (JAO). Citing Section 151A of the Act and the CBDT Scheme framed thereunder, the Court held that notices under Section 148 must be issued in a faceless manner by the Facilitation Assessing Officer (FAO), not the JAO. The revenue's counsel could not dispute this contention. Consequently, the writ petition was allowed, and the impugned notice was quashed and set aside.
The High Court held that the question of law raised in the appeals was covered by its own previous orders in Income Tax Appeal No. 1655 of 2018 and a batch of appeals decided on June 24, 2024, which in turn relied on the Supreme Court's decision in Engineering Analysis Centre of Excellence (P.) Ltd. vs. Commissioner of Income Tax. The Supreme Court had held that amounts paid by resident Indian end-users/distributors to non-resident software suppliers for the resale/use of computer software through EULAs/distribution agreements are not royalty for the use of copyright and do not give rise to income taxable in India. Consequently, persons referred to in Section 195 were not liable to deduct TDS. The High Court found no fault with the Tribunal's orders, agreeing that the appeals did not give rise to any open question of law and were covered by the Supreme Court's pronouncement. The appeals were dismissed.
The High Court held that the appeals did not give rise to any substantial question of law. The Court noted that the issue of whether payments for software supply constitute 'royalty' under Section 9(1)(vi) had been considered and decided by the Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Ltd. vs. Commissioner of Income Tax. The Supreme Court had ruled that amounts paid by resident Indian end-users/distributors to non-resident software manufacturers/suppliers for the resale/use of computer software through EULAs/distribution agreements are not payments of royalty for the use of copyright, and do not give rise to income taxable in India. Consequently, the persons referred to in Section 195 of the Income-tax Act were not liable to deduct TDS. The High Court found that the transactions in the present case were similar to those considered by the Supreme Court, and there was no dispute regarding the DTAA. Therefore, the approach of the Assessing Officer was against the correct position in law as held by the Supreme Court. The High Court agreed with the parties that the issue was covered by the Supreme Court's pronouncement and the ITAT's orders were not faulty. The appeals were accordingly dismissed.
The High Court held that the appeals filed by the Revenue did not give rise to a question of law. The Court noted that the issue of whether payments for computer software to foreign residents are taxable as 'royalties' under Section 9(1)(vi) of the Income Tax Act, 1961, has been authoritatively decided by the Supreme Court in Engineering Analysis Centre of Excellence (P.) Ltd. vs. Commissioner of Income Tax. The Supreme Court had held that such transactions, involving End User License Agreements (EULAs) or distribution agreements, do not create any interest or right in the distributors/end-users amounting to the use or right to use any copyright. Consequently, the provisions of Section 9(1)(vi) were not applicable, and persons referred to in Section 195 were not liable to deduct tax at source. The High Court found that the transactions in the present case were similar to those considered by the Supreme Court and that DTAAs were in place. Therefore, the appeals were dismissed as they did not raise any question of law.
The Bombay High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, in all these petitions are quashed and set aside. The Court's reasoning was based on the concurrence of the Revenue's counsel with the petitioners' argument that these notices were issued by the Jurisdictional Assessing Officer and not the National Faceless Assessment Centre, thus violating Section 151A of the Act. This aligns with the precedent set by the same court in *Hexaware Technologies Limited v/s. Assistant Commissioner of Income Tax Circle 15(1)(2) Mumbai and Ors.*. Consequently, any re-assessment orders, demand notices, or penalty notices passed pursuant to these invalid Section 148 notices are also quashed and set aside. The petitions were disposed of accordingly. Any contentions not covered by the *Hexaware Technologies Limited* judgment were expressly kept open for the petitioners to raise if needed.
The High Court held that the authorisations for the search action under Section 132(1) of the Income Tax Act, 1961, were unsustainable and quashed and set them aside. The Court found that the departmental file, reviewed in a sealed envelope, did not disclose any information that would lead the authorities to have a reason to believe that any of the contingencies contemplated by Section 132(1)(a) to (c) were satisfied. The reasons recorded were considered a mere pretence, with the material being irrelevant and unrelated, and extremely general in nature. The Court emphasized that the satisfaction note did not indicate the process of forming a reasonable belief and did not fulfill the jurisdictional pre-conditions specified in Section 132. Consequently, all consequent actions and notices were also quashed and set aside. However, the Court clarified that the information or material gathered during the search, though invalid, could be relied upon by the revenue for making adjustments to the assessee's income in appropriate proceedings, as permissible in law.
The Bombay High Court held that the reopening of assessment was based on a change of opinion, which is not a valid ground for reopening, reaffirming the principle laid down in Siemens Financial Services Private Limited. Furthermore, the court found that the notice issued under Section 148 of the Income Tax Act, 1961, was invalid as it was contrary to the provisions of Section 151A of the Act and the scheme framed thereunder, as per the ruling in Hexaware Technologies Limited. Consequently, the court quashed and set aside the notice dated 28th March 2023 issued under Section 148A(b), the order dated 13th April 2023 passed under Section 148A(d), and the notice dated 13th April 2023 issued under Section 148. The petition was disposed of accordingly.
The High Court held that the ITAT's decision was based on a sound legal principle and supported by documentary evidence. The Assessee had discharged its burden under Section 68 by providing substantial material, including the return of allotment of shares, company resolutions, and other statutory filings under the Companies Act, which were not doubted by the AO. The ITAT correctly noted that the Revenue had no evidence to prove the money was received for services rendered by the Company. The Court distinguished the present case from CIT vs. Sadiq Shaikh, stating that in this case, the Assessee had proved the genuineness of the transaction by producing documentary evidence. The Court found the ITAT's findings to be neither perverse nor de hors the material on record. Therefore, the two substantial questions of law were answered in favour of the Assessee (Respondent). The appeal was dismissed, upholding the ITAT's order which set aside the addition of Rs.4.99 crores to the Assessee's income.
The High Court held that the authorisations for search and seizure under Section 132(1) of the Income Tax Act, 1961, were invalid and vitiated. The Court examined the departmental file in a sealed envelope and found that it did not disclose any information that would lead the authorities to have a reason to believe that any of the contingencies contemplated by Section 132(1)(a) to (c) were satisfied. The reasons recorded were considered a mere pretence, with the material being irrelevant and general in nature. The Court emphasized that the satisfaction note did not indicate a process of forming a reasonable belief and did not fulfill the jurisdictional pre-conditions specified in Section 132. Consequently, the search and seizure action was quashed and set aside, along with all consequent actions and notices. The Court clarified that while the search was invalid, the information or material gathered could potentially be relied upon by the revenue in appropriate proceedings, subject to legal permissibility.
The High Court held that the impugned Notice issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2015-16 is time-barred. This decision is based on the admitted fact that the notice was issued on or after 1st April 2021 and pertains to AY 2015-16. The Court followed the concession made by the learned Additional Solicitor General before the Supreme Court in the case of Union of India & Ors. v. Rajeev Bansal. Consequently, the Court found no further adjudicatory exercise required, other than to declare the notice as time-barred. The ratio decidendi is that where the Revenue concedes that notices for a specific assessment year are time-barred based on a Supreme Court precedent, the High Court must follow that concession and set aside such notices. The Writ Petition was allowed, and the impugned Notice, along with any consequential actions, was quashed and set aside. Rule was made absolute.
The High Court held that the impugned notices dated March 31, 2023, and April 7, 2022, were issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO). The Court found that this issuance was not in accordance with the provisions of Section 151A of the Income Tax Act, 1961, and the scheme framed thereunder. Relying on its own previous decision in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax Circle 15(1)(2) Mumbai and Ors., the Court concluded that such notices would be invalid. Consequently, the impugned notices were quashed and set aside. The petitions were disposed of accordingly.
The High Court held that the issue of improper sanction, as decided in the case of Siemens Financial Services Private Limited (supra), squarely applies to the present petition. The court reiterated its finding that if the sanction is invalid (i.e., granted under the wrong sub-section of Section 151), the notice issued based on such sanction is also invalid and must be quashed. Consequently, any assessment order passed relying on an incorrect sanction would also have to be quashed. Therefore, all notices and orders impugned in the petition, along with any consequential notices and assessment orders, were quashed and set aside. The court clarified that other grounds could be raised by the parties at an appropriate stage in other proceedings.
The Bombay High Court held that the sanction for the order under Section 148A(d) and the notice under Section 148 were invalid. The court noted that the assessment year was 2018-2019 and the impugned order and notice were issued on April 6, 2022, which is beyond the three-year period from the end of the assessment year. Consequently, the sanctioning authority required was the PCCIT, as stipulated under Section 151(ii) of the Act. The proviso to Section 151, which came into effect from April 1, 2023, was not applicable to the present case. Relying on its previous decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the court found the sanction to be invalid. Therefore, the impugned order dated April 6, 2022, under Section 148A(d) and the notice dated April 6, 2022, under Section 148 of the Act were quashed and set aside. The petition was disposed of, with all rights and contentions kept open.
The High Court held that the present writ petitions are covered by its earlier judgment in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax Circle 15(1)(2) Mumbai and Ors. Consequently, the Court quashed and set aside the notices issued under Section 148 of the Income Tax Act, 1961. Furthermore, any re-assessment orders, consequential demand notices, or penalty notices that may have been passed were also quashed and set aside. The Court also stipulated that any contentions raised in the petitions that were not covered by the Hexaware Technologies judgment would be kept open to be raised by the petitioners should the need arise in the future. The petitions were disposed of in accordance with this decision.
The High Court held that the present writ petitions are covered by its earlier judgment in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax Circle 15(1)(2) Mumbai and Ors. Consequently, the notices issued under Section 148 of the Income Tax Act, 1961, were quashed and set aside. The Court further directed that if any re-assessment order, consequential demand notices, or penalty notices were passed, they would also stand quashed and set aside. Any contentions raised in the petitions that were not covered by the Hexaware Technologies judgment were expressly kept open to be raised by the petitioners should the need arise. The petitions were disposed of accordingly.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2014-2015 is barred by limitation. The Court relied on its previous judgment in The New India Assurance Company Limited (supra) and another judgment in Godrej Industries Limited (supra), which dealt with similar issues for AY 2013-2014 and AY 2014-2015 respectively. The reasoning was that the impugned notices were issued after the amendment to the Finance Act, 2021, and were based on pre-amendment provisions. The Court found that the limitation period for reopening the assessment for AY 2014-2015, even with extensions under TOLA, had expired by March 31, 2021. Therefore, the notices issued in July 2022 were beyond the statutory time limit. The Court explicitly stated that it was restricting its decision only to the point of limitation. Other grounds of challenge raised by the petitioner were not discussed. The ratio is that reassessment notices issued for AY 2014-2015 after the amendment of the Finance Act, 2021, based on pre-amendment provisions, are barred by limitation if the original limitation period had expired before the amendment.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2013-2014, was issued beyond the period of limitation. The Court reasoned that the limitation period for reopening assessment for AY 2013-14 expired on March 31, 2021. The notifications and TOLA did not extend this period in a manner that would validate notices issued in July 2022. The Court emphasized that the Supreme Court in Ashish Agarwal (Supra) explicitly allowed assessees to raise all defences available under Section 149 of the Act. The Court found the Revenue's argument that notices issued between April 1, 2021, and June 30, 2021, could be deemed issued on March 31, 2021, to be fallacious, as it contradicted the applicability of the new reassessment law. The Court noted that other High Courts (Gujarat and Allahabad) had also taken the view that notices for AY 2013-14 were barred by limitation. Consequently, the impugned notices were quashed and set aside. The Court explicitly stated that this decision was restricted only to the point of limitation.